Friday, January 07, 2005

Marshall Aid will not be repeated

It seems that the words “Marshall” and “plan” are the easiest to throw around in the political world, mostly by people who have not the slightest idea of what the plan consisted of, what its aim was and how it worked. Yesterday (January 6 – how appropriate, for it was on this day that the gift-bearing magi arrived in Bethlehem, according to tradition, and not December 6 as I had originally written) Gordon Brown, our own home-grown magus, who is capable of turning millions of taxpayers’ money into pure dross, once again came up with the old Marshall Plan wheeze.

According to him, now is the West’s chance to send the equivalent of the Marshall Plan to Africa by doubling the existing aid. As the thoughtful editorial in today’s Daily Telegraphpoints out, there are several crucial differences between what George Marshall proposed and what Gordon Brown or, for that matter, Louis Michel, Kofi Annan (father of Kojo of the oil-for-food scandal fame), Bono, Bob Geldof and other suchlike political thinkers propose.

According to Marshall, America’s objective in sending the aid over was

“… should be the revival of a working economy so as to permit the emergence of political and social conditions in which free institutions can exist”.

None of the crucial words appeared in Mr Brown’s speech, which merely talked of doubling the aid and halving the poverty. Since aid has been growing steadily over the last decades with poverty growing even more spectacularly, the equation seems a very unlikely one.

The Marshall Plan was a one-off loan, to be paid back, to help the war-stricken European countries to rebuild and to strengthen their political structures, as the Communists were standing behind the scenes, hoping to utilize the destruction and poverty for their own purposes.

Here is the most telling paragraph of the article:

“The Labour "Marshall Plan" for Africa has almost no resemblance to its illustrious predecessor. Once you strip away the rhetoric about a "once in a generation chance to solve world poverty", what is proposed is three initiatives. First, the writing off of Third World debts; second, the doubling of aid; third, the use of financial instruments to front-load aid, so future payments are sped up and received immediately. As so often with Labour, what these amount to is throwing public money at the problem, irrespective of the consequences. The last thing Africa needs is more aid. Already, it receives something like eight per cent of GDP in foreign aid, or 13 per cent if you strip out the big economies of South Africa and Nigeria (at its peak, the Marshall Plan amounted to three per cent of European GDP). Yet much of this money is wasted. Take but one example: the budget for the Department for International Development is growing at nine per cent a year, more than any other department, yet last year it spent £700 million on consultants.”

The fact is, that the main plank of the Marshall Plan has not materialized in the African states: free institutions. Aid that has kept bloodthirsty kleptocrats in power or helped them to gain power is inimical to “property rights, the rule of law and democracy”, without which Africa will not develop. Mr Brown seems not to understand this and neither do his "colleagues" in the EU.